Marks & Spencer has announced its plans to cut 7,000 jobs over the next three months across its stores and management, stating that the coronavirus pandemic has made it clear that there has been a “material shift in trade.”
The grocery and department store chain has been hit hard by a move to online shopping by consumers, revealing that in-store sales of clothing and home goods were ‘well below’ those of 2019. It has cited its strength of online and home delivery services.
The retailer hopes that a “significant proportion” of the job cuts, marking a tenth of its workforce, will be voluntary redundancy and early retirement.
Total revenue was down 38.5 per cent in the last 13 weeks. In the eight weeks since store re-opening total sales have been down 29.9 per cent with trends steadily improving. In those eight weeks store sales were down 47.9 per cent and online has continued to perform strongly up 39.2 per cent on last year.
In a statement, Marks & Spencer said it “is too early to predict with precision where a new post-Covid sales mix will settle, we must act now to reflect this change.
‘As a result we are today embarking on a multi-level consultation programme which we anticipate will result in a reduction of c. 7,000 roles over the next 3 months. These will include departures in our central support centre, in regional management, and in our UK stores, reflecting the fact that the change has been felt throughout the business.
We expect a significant proportion will be through voluntary departures and early retirement. In line with our longstanding value of treating our people well, we will now begin an extensive programme of communication with colleagues.’
Marks & Spencer does expect to be creating a number of new jobs as it invests further in online operations, as well as a new food warehouse and plans to reshape its store portfolio over the course of the year.
Chief executive, Steve Rowe, said: “In May we outlined our plans to learn from the crisis, accelerate our transformation and deliver a stronger, more agile business in a world in which some customer habits were changed forever. Three months on and our Never the Same Again programme is progressing; albeit the outlook is uncertain and we remain cautious.
“As part of our Never The Same Again programme to embed the positive changes in ways of working through the crisis, we are today announcing proposals to further streamline store operations and management structures. These proposals are an important step in becoming a leaner, faster business set up to serve changing customer needs and we are committed to supporting colleagues through this time.”